Lessons from the Past: What Obamacare and Hillarycare say about Bernie Sanders’s “Medicare For All”

 /  June 5, 2016, 11:03 p.m.

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“Medicare for All,” Bernie Sanders’s radical healthcare plan, which calls for the creation of a federally administered single payer system, begins with a lofty declaration: “It has been the goal of Democrats since Franklin D. Roosevelt to create a universal health care system.” This controversial claim highlights a fascinating and often overlooked point: that Sanders’s proposal is part of a long and storied history of Democratic health-care proposals. In the midst of all the speculation regarding “Medicare for All,” little has been said of this history; but it can offer startling insights. By examining the past two attempts by a Democratic president to pass health-care legislation, one successful, the other not, we can see how Sanders’s ambitious proposal stands fundamentally apart from this Democratic legacy and represents a revolution of unprecedented proportions.

The Democratic Party’s first attempt at health-care reform since the 1960s began less than a month after former president Bill Clinton first took office. The Health Security Act of 1993, or “Hillarycare,” as it was later known, was at the time the most radical healthcare reform proposed by a president since the creation of Medicaid. Written by a White House committee headed by then-first lady Hillary Clinton, Hillarycare was based on the concept of managed care competition—an economic theory that claims the federal government can manage the health insurance market without eliminating independent firms. By doing so, the government can maximize consumer benefits by ensuring an equitable and efficient healthcare system while maintaining cost-cutting competition. The bill called for the creation of regional “alliances,” health insurance purchasing cooperatives that firms would pay into. These alliances would offer different private plans, and firms would be required to offer these plans to their employees (an employee mandate). Jamie Starr, a chief advisor to Clinton and a lead architect of the bill, claimed that the Health Security Act of 1993 would “create a workable compromise between market and regulatory approaches.” Health insurance would still be a private industry, but would now be broadly organized under massive umbrellas, and would be heavily regulated—much in the same way utilities are today.  

Along with alliances, the bill called for the creation of a National Health Board, an appointed federal agency that would have general oversight over the health insurance market, and for the “standardization of plans,” the establishment of certain benefits that would be required in all health insurance policies. These last two points quickly became the most controversial part of the proposal as a whole, and proved to be incredibly costly to the Democrats during the 1994 midterm elections. In the end, the bill never managed to procure anywhere near the necessary votes and was declared dead in September of 1994.

Obamacare—the Democratic Party’s more recent attempt at health-care reform—was heavily influenced by Hillarycare’s failure. As political scientist and Atlantic columnist Norman Ornstein noted, “the Obama White House took a number of lessons from the Clinton experience with healthcare policy,” the most important of them being that it let Congress write the bill itself.  Rather than writing their own detailed proposal, as the Clinton administration had, the Obama White House laid out a series of goals for the future health reform bill and then let both houses of Congress debate the specifics. The goal here was to encourage bipartisan support; while House Minority Leader Eric Cantor made it clear before the president even took office that he would not negotiate over health reform, there were numerous Republican senators who appeared willing to bargain. In fact, much of the eventual plan was written by a group of six senators, three Republicans and three Democrats, a group which was famously nicknamed the “Gang of Six.” While the president’s bipartisan hopes were eventually crushed by Senate Minority Leader Mitch McConnell, who allegedly warned the Republican members of the Gang of Six that their “futures in the Senate would be much dimmer” if they moved towards a deal with the Democrats, his overall strategy still succeeded. By engaging with Republican leaders, and allowing the bill to be negotiated in Congress, the Democrats in the Senate were able to rally their party and achieve a near-impossible feat: unite all sixty Democratic senators, from socialist Bernie Sanders to relative conservative Joe Lieberman, in support of the bill.

The result was the Affordable Care Act, or as it is widely known, Obamacare. Like Hillarycare, Obamacare is centered around the concept of insurance-purchasing cooperatives. The plan divides the health insurance market into state-level “exchanges,” which are essentially alliances operating on a smaller scale. It includes a controversial employee mandate, like Hillarycare, and an even more controversial individual mandate requiring all citizens to have some form of health coverage. It requires that all new plans comply with one of four standard benefit categories, resembling Clinton’s standardization of plans, and contains an expansion of Medicaid, which enlarges the program to include anyone with an income below 133 percent of the federal poverty line.

By looking at Hillarycare and Obamacare on this broad level, it is striking how similar the two plans are. Their differences can be attributed for the most part to political strategy: the Health Security Act of 1993 was created by a White House committee solely dedicated to satisfying the administration’s desires, while Obamacare was written in congressional chambers, with broad congressional support a priority from day one. Both plans are heavily influenced by the concept of managed care competition, and both strive at their core to manage the massive healthcare industry while maintaining a free market for health insurance.

While the mainstream media frames Sanders’s “Medicare For All” proposal as an extension of the logic of these plans, in reality, it is a strikingly different proposal. Sanders’s proposal calls for a single-payer healthcare system: a universal plan that covers “the entire continuum of healthcare.” By moving to this single-payer system, he claims the “government will finally have the ability to stand up to drug companies and negotiate fair prices for the American people collectively.” Rather than toe the line between free-market economics and government management, “Medicare for All” falls entirely on the left. Both Hillarycare and Obamacare subscribed to the premise of managed care competition; both proposed systems under which healthcare would remain a competitive industry. Sanders’s proposal, with its universal plan for health insurance and government-negotiated price for medical care, is representative of an entirely different approach; “Medicare for All” would essentially take the competition entirely out of American healthcare.

By placing “Medicare for All” in the context of Obamacare and Hillarycare, one can better assess the accuracy of Sanders’s claim that his proposal is an extension of a Democratic legacy. At the heart of both Hillarycare and Obamacare was a simple desire: to make the American healthcare system fairer and more efficient. This desire is also at the heart of Sanders’s proposed single-payer system; but while Clinton’s alliances and Obama’s exchanges overhauled the health insurance market, “Medicare for All” would effectively destroy it. If Obama and Clinton’s legislative attempts reveal anything, it is that the Democratic party’s “goal” has been to reform, not replace, the healthcare system. To claim that universal healthcare has been a Democratic “dream” since Franklin Roosevelt is simply inaccurate (and ironic, given that Roosevelt himself, over the course of almost four terms, never attempted a single healthcare reform). While “Medicare for All” may reflect traditional Democratic aspirations for a healthcare system that works for all, it stands fundamentally apart in how it sets out to achieve that goal.

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Jacob Toner Gosselin

Jacob Gosselin is a rising fourth-year, majoring in Math and Economics and minoring in Creative Writing. He is interested in health policy and criminal justice reform. He's currently working as a data journalist with Injustice Watch, a non-profit newsroom in Chicago. He's previously interned at the Brookings Institution's Center for Health Policy, and the Kaiser Family Foundation. On campus, Jacob is the Captain of the Varsity Cross Country and Track teams, and was the Managing Editor of The Gate from 2017-2018. He enjoys reporting on local issues, running with his friends, and tutoring at Chavez Middle School with the Chicago Peace Corps.


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